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MODULE 3A : ROLE OF PERFORMANCE MEASURES (MULTIPLE ROLES OF PERFORMANCE…
MODULE 3A : ROLE OF PERFORMANCE MEASURES
PERFORMANCE vs PERFORMANCE MEASURES
PERFORMANCE PG240
SHOULD BE SEEN MORE HOLISTICALLY THROUGH
FINANCIAL DIMENSION - COMBINATION OF FINANCIAL MEASURES ( PROFIT BEFORE TAX, ROI)
NON FINANCIAL DIMENSION - NON FINANCIAL BUT QUANTITATIVE TERMS (MARKET SHARES %, NET PROMOTER SCORE, QUALITY PASS RATE, PATENT REGISTRATION)
QUANTITATIVE DIMENTION - COMBINATION OF FINANCIAL & NON FINANCIAL QUANTITATIVE TERMS ( DOLLAR SALES PER SQUARE METRE OF FLOOR SPACE, EARNINGS PER SHARES)
QUALITATIVE DIMENSIONS - SUBJECTIVE JUDGEMENTS AND OPINIONS (EMPLOYEE SATISFACTION, REPUTATION, ENVIRONMENTAL AWARENESS)
CONCEPT OF PERFORMANCE PG241
PERFORMANCE MONITORING - SURVEILANCE OVER PERFORMANCE
PERFORMANCE MANAGEMENT - TAKING DELIBERATE ACTION
PERFORMANCE IMPROVEMENT - ABSOLUTE OR RELATIVE TARGET THAT NEEDS TO BE ACHIEVE
PERFORMANCE REPORTING - PUBLICATION OF INFO ON PERFORMANCE
PERFORMANCE MEASURES PG240
IMPLIES A SCIENTIFIC TECHNIQUE INVOLVING A COMPARISON TO A SPECIFIC SCALE
FINANCIAL PERFORMANCE MEASURES - RATIO ANALYSIS
PG 242
PROFITABILITY
LIQUIDITY
GEARING
ACTIVITY / EFFICIENCY
SHAREHOLDERS RETURNS
FINANCIAL ACCOUNTING vs STRATEGIC MANAGEMENT ACOCUNTING PG 242
FINANCIAL ACCOUNTING
ANNUAL FIGURES IN EXTERNAL FINANCIAL STATEMENT
CONSOLIDATED DATA
HIGHLY AGGREGATED DATA ON INCOME & EXPENSES
COMPARISON TO PRIOR YEAR
STRATEGIC MANAGEMENT ACOCUNTING
MONTHLY FIGURES
REPORTING FOR INDIVIDUAL BUSINESS UNITS & RESPONSIBILITY CENTRES
DETAILED ANALYSIS OF INDIVIDUAL INCOME & EXPENSE LINE ITEMS
COMPARISON TO PRIOR YEAR, BUDGET AND EXTERNAL BENCHMARK
COMPARISON TO BUDGET, STANDARD COST
ENABLES VARIANCE ANALYSIS, ACTIVITY BASED COST ANALYSIS
PROVIDES INCREASED INFORMATION ABOUT MARKETS, CUSTOMERS, COMPETITORS , SUPPLY ARRANGEMENTS & PRODUCTION PROCESSES BASED ON FORMAL & INFORMAL SOURCES
NON FINANCIAL PERFORMANCE PG 243
ORGANISATIONS MAINTAIN COMPREHENSIVE STATISTICAL DATA TO SUPPORT PLANNING, DECISION MAKING & CONTROL BY :
DATA CAPTURED BY AS A BY PRODUCT OF THE ACCOUNTING PROCESS ( QUANTITY OF PRODUCT PURCHASED AND SOLD, LABOUR WORKED HOURS
DATA CAPTURED BY THE ORGANISATION FROM NON ACCOUNTING SYSTEMS ( ON TIME DELIVERY, PRODUCT QUALITY)
EXTERNAL SURVEYS ( CUSTOMER SATISFACTION)
PUBLISHED DATA (ABS / INDUSTRY ASSOCIATIONS
STOCK EXCHANGED DATA ( MARKET CAPITALISATION
MEASURABILITY OF PERFORMANCES PG244
NET PROMOTER SCORE (NPS) - MEASURE CUSTOMER SATISFACTION
SAFETY INDEX
MULTIPLE ROLES OF PERFORMANCE MEASUREMENT PG246
AIDS IN PLANNING, **DECISION MAKING, CONTROL IN PURSUIT OF VALUE CREATION
+ PROVIDES INFO ON ENVIRONMENTAL AND SOCIAL
SUSTAINABILITY
FOR
INTEGRATED REPORTING** PURPOSES
AS
SIGNAL
TO INVESTORS AND OTHER STAKEHOLDER
1. VALUE CREATION PG244
MAY INCREASE SHAREHOLDER VALUE
PORTERS 1995 - VALUE CHAIN
2. PERORMANCE & SUSTAINABILITY PG249
SUSTAINABILITY
PERFORMANCE MUST BE CONSIDERED OVER TIME
MEETING THE NEEDS OF TODAY WITHOUT COMPROMISING THE ABILITY OF FUTURE GENERATIONS TO MEET THEIR OWN NEEDS
GRI SUSTANABILITY REPORT G4 STANDARDS
STRATEGY & ANALYSIS
ORGANISATIONAL PROFILE
MATERIAL ASPECTS & BOUNDARIES
STAKEHOLDER ENGAGEMENT
REPORT PROFILE
GOVERNANCE
ETHICS & INTEGRITY
SPECIFIC STANDARD DISCLOSURES ON MANAGEMENT APPROACH & PERFORMANCE INDICATORS CATEGORIES
ECONOMIC
ENVIRONMENTAL
SOCIAL
LABOUR PROACTICES
HUMAN RIGHTS
SOCIETY
PRODUCT RESPONSIBILITY
3. INTEGRATED REPORTING PG252
INTERGRATED REPORTING IS AN EERGING AND EVOLVING TREND IN CORPORATE REPORTING. IT OFFERS PROVIDERS OF FINANCIAL CAPITAL TO AN ORGANISATION WITH AN INTEGRATED REPRESENTATION OF THE KEY FACTORS THAT ARE MATERIAL TO THAT ORGANISATION'S PRESENT AND FUTURE VALUE CREATIONS
INTEGRATED REPORTS BUILD ON SUSTAINABILITY REPORTING FOUNDATIONS AND DISCLOSURES. THROUGH THE INTERGATED REPORT AN ORGANISATION PROVIDES A CONCISE COMMUNICATION ABOUT HOW ITS STRATEGY GOVERNANCE,PERFORMANCE AND PROSPECTS LEAD TO THE CREATION OF VLUE OVER TIME
INTEGRATED REPORT IS NOT INTENDED TO BE AN EXTACT OF THE TRADITIONAL ANNUAL REPORT NOT A COMBINATION OF THE ANNUAL FINANCIAL STATEMENTS AND THE SUSTAINABILITY REPORT. IT INTERACTS WITHOTHER REPORTS AND COMMUNICATIONS BY MAKING REFERENCE TO ADDITIONAL DETAILED INFORMATION THAT IS PROVIDED SEPERATELY
SIGNALLING PG253
AIMED TO INFLUENCE SOMEONE ELSES DECISION
OCCURS WHEN A MEASURE IS USED TO COMMUNICATE INFORMATION
GOVERNANCE, RISK MANAGEMENT, PERFORMANCE PG256
CORPORATION ACT - PROVIDES BROAD LEGAL FRAMEWORK UNDER WHICH COMPANIES OPERATE
ASIC & FRC - PROVIDES REGULATION FOR COMPANIES AND SECURITIES IN AUSTRALIA
ASIC
AUS'S CORPORATE, MARKET & FINANCIAL SERVICE REGULATOR
ENSURES THAT FINANCIAL MARKET IS FAIR AND TRANSPARENT
SUPPORTED BY CONFIDENT AND INFORMED INVESTORS
+ADMINISTERS AND ENFORCES CORPORATION ACT
+MAINTAINS, FACILITATE & IMPROVE PERFORMANCE OF FINANCIAL SYSTEM
PROMOTE CONDIDENT & INFORMED PARTICIPATION BY INVESTORS AND CONSUMERS IN THE FINANCIAL SYSTEM
ADMINISTER & ENFORMCE THE LAW
MAKE INFORMATION ABOUT COMPANIES & OTHER BODIES AVAILABLE TO THE PUBLIC AS AOON AS PRACTICABLE
ASX CORPORATE GOVERNANCE PRINCIPLES & RECOMMENDATIONS PG257
LAY SOLID FOUNDATIONS FOR MANAGEMENT & OVERSIGHT IN PARTICULAR DEFINING THE ROLES OF AN RESPONSIBILITY OF THE BOARD AND MANAGEMENT AND HOW THEIR PERFORMANCE IS MONITORED AND EVALUATED
STRUCTURE THE BOARD TO ADD VALUE THROUGH APPROPRIATE SIZE, COMPOSITION AND COMMITMENTS TO ITS ROLE
ACT ETHICALLY AND RESPONSIBLY
SAFEGUARD INTEGRITY IN CORPORATE RPORTING
MAKE TIMELY AND BALANCED DISCLOSURE OF MATTERS THAT WOULD LIKELY HAVE A MATERIAL EFFECT ON THE PROVE / VALUE OF ITS SECURITIES
RESPECT THE RIGHTS OF SECURITY HOLDERS BY PROVIDING APPROPRIATE INFORMATION
RECOGNISE AND MANAGE RISK BY ESTABLISHING AND EVALUATING A SOUND RISK MANAGEMENT FRAMEWORK
REMUNERATE DIRECTORS AND EXECUTIVES FAIRLY AND RESPONSIBLY TO ATTRACT AND RETIN MOTIVATE HIGH QUALITY PEOPLE
RISK MANAGEMENT STANDARD PG258
DEFINES RISK AS "EFFECT OF UNCERTAINTY ON OBJECTIVES (AS/NZS ISO 21000:2009,P1) WHERE EFFECT IS A DEVIATION FROM THE EXPECTED.
FIVE STEPS
ESTABLISH THE GOALS AND CONTEXT FOR RISK MANAGEMENT
IDENTIFY RISKS
ANALYSE RISK INTERMS OF LIKELIHOOD AND CONSEQUENCES AND ESTIMATE THE LEVEL OF RISK FACED
EVALUATE AND RANK THE RISKS
TREAT THE RISKS THROUGH THE MOST APPROPRIATE OPTIONS
ETHICS & PERFORMANCE MEASUREMENT PG260
FUNDAMENTAL PRINCIPLES
S110.1
INTEGRITY - TO BE STRAIGHTFORWARD & HONEST IN PROFESSIONAL AND BUSINESS RELATIONSHIPS
S120.1
OBJECTIVITY - TO NOT ALLOW BIAS, CONFLICT OF INTEREST OR THE UNDUE INFLUENCE OF OTHERS TO OVERRIDE PROFESSIONAL OR BUSINESS JUDGEMENTS
S130.1
PROFESSIONAL COMPETENCE AND DUE CARE - TO MAINTAIN PROFESSIONAL KNOWLEDGE AND SKILL AT THE LEVEL REQUIRED TO ENSURE THAT CLIENTS OR EMPLOYERS RECEIVE COMPETENT PROFESSIONAL SERVICE BASED ON CURRENT DEVELOPMENTS IN PRACTICE, LEGISLATION AND TECHNIQUES AND ACT DILIGENTLY IN ACCORDANCE WITH APPLICABLE TECHNIC AND PROFESSIONAL STANDARDS
S140.1
CONFIDENTIALITY - TO RESPECT THE CONFIDENTIALITY OF INFORMATION ACQUIRED AS A RESULT OF PROFESSIONAL AND BUSINESS RELATIONSHIPS AND THEREFORE, NOT DISCLOSE ANY SUCH INFORMATION TO 3RD PARTY WITHOUT PROPER & SPECIFIC AUTHORITY UNLESS THERE IS LEGAL OR PROFESSIONAL RIGHT OR DUTY TO DISCLOSE, NOR USE THE INFO FOR PERSONAL ADVANTAGE OF THE MEMBER OR 3RD PARTY
S150.1
PROFESSIONAL BEHAVIOUR - TO COMPLY WITH RELEVANT LAWS AND REGULATIONS AND AVOID ANY ACTION THAT DISCREDITS THE PROFESSION
THREATS PG261
SELF INTEREST THREAT
- THE THREAT THAT A FINANCIAL OR OTHER INTEREST WILL INAPPROPRIATELY INFLUENCE THE MEMBER'S JUDGEMENT / BEHAVIOURS
SELF REVIEW THREAT
- THE THREAT THAT A MEMBER WILL NOT APPROPRIATELY EVALUATE THE RESULTS OF A PREVIOUS JUDGEMENT MADE OR SERVICE PERFORMED BY THE MEMBER/BY ANOTHER INDIVIDUAL WITHIN THE MEMBERS FIRM OR EMPLOYING ORGANISATION, ON WHICH THE MEMBER WILL RELY WHEN FORMING A JUDGEMENT AS A PART OF PROVIDING CURRENT SERVICE
ADVOCACY THREAT
- THE THREAT THAT A MEMBER WILL PROMOTE A CLIENT'S /EMPLOYERS POSITION TO THE POINT THAT MEMBER'S OBJECTIVITY IS COMPROMISED
FAMILIARITY THREAT
- THE THREAT DUE TO A LONG OR CLOSE RELATIONSHIP WITH A CLIENT OR EMPLOYER, MEMBER WILL BE TOO SYMPATHETIC TO THEIR INTEREST OR TOO ACCEPTING TO THEIR WORK
INTIMIDATION THREAT
- THE THREAT WHEN MEMBER WILL BE DETERRED FROM ACTING OBJECTIVELY BECAUSE OF ACTUAL OR PERCEIVED PRESSURES INCLUDING ATTEMPTS TO EXERCISE UNDUE INFLUENCE OVER THE MEMBER
THEORIES PG263
AGENCY
THE RELATIONSHIP BETWEEN PRINCIPAL(OWNER) AND DIRECTORS / MANAGERS (ACTS AS AGENT FOR OWNER)
CONTROL SYSTEM & PERFORMANCE MEASUREMENT ARE USED TO MONITOR THE ACTIONS OF AGENT
PRINCIPALS DELEGATE AUTHORITY TO AGENTS
TO OVERCOME PROBLEM - "REMUNERATION STRATEGY"
CONTINGENCY
THERE IS NO UNIVERSAL BEST WAY TO MEASURE PERFORMANCE
EACH ORGANISATION NEEDS TO DEVELOP AN APPROPRIATE PERFORMANCE MEASUREMENT SYSTEM RELEVANT TO ITS NEEDS